This is a YouTube video titled "2023 Outlook on Rates and Homes! #homeloans #homebuyer #interestrates #housingmarket" containing a detailed explanation about economic indicators such as GDP, the inverted yield curve, and their impact on mortgage rates and housing market resilience. The content was created on April 1, 2023, and provides an outlook on mortgage rates and home values during a recession. The speaker is a single individual providing an informative commentary without a conversational format.
The Federal Reserve is predicting GDP to drop by 2.6% in 2023. That's gross domestic product, or the value of goods and services. And that's a really good thing for mortgage rates because every single time that GDP drops, it means we're in a recession. And every single time there's a recession, mortgage rates drop as well. And that's not the only sign. The inverted yield curve, which is a long, confusing way to say that short term interest rates are higher than long term rates. Think about it. If I give you 10 bucks to pay me back on to loan you well, if you only take two years to pay me back, it should be a lower rate than if you take 10 years because you have my money for a longer period of time. But things are actually inverted because the Fed's been pushing up their short term rates where the shorter term rates are higher and more expensive than the longer term rates, which doesn't make any sense. But every single time that gets inverted like that, a recession is on the way. So big picture, what does it mean? Mortgage rates are going to continue to drop, just as we predicted. But house values are probably the most resilient investment during recessions. They're going to stay strong because people still need their homes. They're not going to sell their home just because we're in a recession. So values stay strong, rates go down 20, 20.
